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Silver (XAG/USD) trades on the back foot on Thursday as bulls take a breather and book partial profits after the metal climbed to record highs near $58.98 on Wednesday. At the time of writing, XAG/USD is trading around $56.87, down roughly 2.77% on the day.

The fundamental backdrop remains constructive for Silver, helped by dovish Federal Reserve (Fed) expectations, resilient industrial and investment demand, and a tightening supply environment that has helped propel the metal to a near 100% gain year-to-date.

Meanwhile, a Gold-Silver ratio near 73 highlights Silver’s relative outperformance within the precious metals space, suggesting further upside potential for XAG/USD.
 

From a technical perspective, the daily chart shows early signs of fatigue, with price action stalling below the record high. A bearish divergence has emerged between price and the Relative Strength Index (RSI), signalling cooling momentum, though a strong reversal still appears unlikely as the broader uptrend remains intact.

Prices continue to hold well above key moving averages, keeping the bias tilted to the upside. Initial support is seen around $55.00, and a decisive break below this zone could open the door to a deeper pullback toward $50.00, where the 50-day Simple Moving Average (SMA) is likely to cushion the downside.

On the upside, a sustained break above the all-time high at $58.98 would push Silver deeper into uncharted territory, exposing the $60.00 psychological level as the next bullish target.

The Average Directional Index (ADX) at 28.56 rises, reinforcing a strengthening directional bias; sustained trend strength would favor further upside as long as price holds above the 50-day SMA.

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